Business News

Greece completes bond swap worth over 177 billion euros

Mar 12, 2012, 15:29 GMT

Athens - Greece said it had completed a bond swap worth over 177 billion euros (232-billion dollars) on Monday, drastically reducing its national debt.

'The Hellenic Republic announced that it has completed the exchange of the 177,252,131,542 outstanding principal amount of bonds issued by the Republic and governed by Greek law pursuant to its invitations on February 24, 2012,' the Finance Ministry said in a press release.

The ministry said 85.8 per cent of private investors holding bonds issued under Greek law had signed up to the debt swap deal last week, which will slash the country's 350-billion-euro debt by 105 billion euros.

The deadline for foreign-law bonds has been extended to March 23.

The deal, under which investors were asked to accept an effective loss of around 70 per cent, saved Greece a default by the end of this month by paving the way for the release of a second international bailout worth 130-billion euros.

Horst Reichenbach, the head of the European Union's special task force to help rebuild the Greek economy arrived in Athens where he will meet officials ahead of issuing a report on the country's progress.

Reichenbach, a German who has worked for the European Union since the 1970s, will meet with newly appointed Development Minister Anna Diamantopoulou to discuss the pace of austerity reforms demanded by Greece's creditors.

He is also expected to hold talks with union heads to discuss labour reforms aimed at reducing spending through wage and pension cuts.

The Task Force for Greece is expected to publish a progress report on Thursday which will focus on structural reforms and efforts to absorb EU funds to jump-start infrastructure projects and investments.

A series of austerity measures introduced last year in return for emergency bailout loans have been counterproductive for the Greek economy.

Greece's industrial production fell 5 per cent in January compared with the same period a year earlier, the Hellenic Statistical Authority said Monday.

Industrial production fell by 11.3 per cent in December 2011.

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